Almost half of U.S. financial managers are slashing hiring orspending plans as political uncertainty weighs on the businessoutlook during the election year, according to a survey releasedWednesday.

Forty-seven percent of U.S. firms reported pulling back onemployment or investment, according to the quarterly DukeUniversity/CFO Global Business Outlook poll.

About eight in 10 chief financial officers said the U.S. economyfaces moderate-to-large political risk due to election uncertainty,“Washington dysfunction” and regulations including proposedminimum-wage increases, according to the report, which is done inconjunction with CFO Magazine. Almost 40% of the U.S. CFOs saidthey believed foreign companies were less willing to do businesswith the U.S. because of the cloudy political atmosphere.

The report included moderately encouraging news for some U.S.workers, as companies ranked the difficulty hiring and retainingskilled employees as their second-biggest concern, up from fifthlast year. While payroll gains have cooled, this tightness in themarket could cause wage pressures to bubble up, said Campbell R.Harvey, a professor at the Duke University Fuqua School of Businessand a founding director of the survey.

“The tight labor market, combined with a skills mismatch betweenwhat companies want and what they can get, makes wage inflationinevitable,” Harvey said in a statement.

The survey also revealed an international divide on financialchiefs' attitudes toward trade deals, with 54% in the U.S.expressing confidence in the economic benefits of such pacts,compared with about two-thirds of CFOs outside the U.S.

The European CFOs polled saw a 42% probability that the U.K.will vote June 23 to leave the European Union, the surveyshowed.

The survey, which concluded June 3, polled more than 1,200 CFOs,including 626 from the U.S., according to the group.

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.